Bangladesh garment entrepreneurs say 319 factories are closing down

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has said that 319 factories, unable to cope with the global competition, in the sector are going to be closed.

The organisation’s President Siddiqur Rahman expressed worries over the issue at a media conference in its office in Karwan Bazar on Saturday.

“It is a matter of concern that 618 factories shut down in past three years after their productivities dropped due to various reasons. 319 more factories are also going to close down,” he said.

The garment sector is facing the challenge of gas and power crisis, high interest rate of bank loans, devaluation of US dollar, and cut in price of its products, according to the BGMEA president.

He demanded halving the tax at source for the sector to 0.3 percent in 2016-17 like the previous fiscal year.

He also suggested that no value added tax should be imposed on garment accessories, and duty-free import of fire extinguishers should be allowed to help the entrepreneurs tackle the challenges.

Rahman said the export from the sector has been growing by an average of 10 percent over past five years.

“We need 12 percent annual growth in order to reach the export target of $50 billion by 2021. But the growth was only 6.81 percent over past 22 months,” he said.

“So we are 3.19 percentage points behind from the expected average growth and 5.19 percentage points behind from the expected growth for the 2021 target,” he added.